Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
USDA Attache: El Salvador’s 2018-2019 Coffee Crop Pegged at 692,000 Bags
CoffeeNetwork (New York) – According to the latest USDA Attache report, El Salvador’s coffee production is expected to increase to 640,000 sixty-kg bags in Marketing Year (MY) 2017/18. Even though production increased by approximately five percent compared to the previous cycle, the Salvadoran coffee sector continues to struggle mainly due to continued coffee leaf rust, low international prices and lack of financing. The MY2018/19 crop is expected to reach 692,000 bags. Thus far the rainy season has provided adequate moisture for coffee flowering and is expected to unfold favorably for coffee bean development.
New production numbers compiled by Post reveal that the 2017/18 coffee harvest is expected to reach 640,000 bags, up eleven percent from previous estimates. This is also a five percent increase from the 2016/17 crop, mainly due to less damage than expected by leaf rust throughout the growing season and more new plants coming into production. The 2018/19 production is estimated at 692,000 bags.
Consumption in cafes continues to grow in El Salvador. The number of establishments is expanding – now opening in strip malls and major shopping malls which is the case with Juan Valdez, Starbucks and local competitors Viva Espresso and The Coffee Cup. Also, new coffee brands at the retail level are stimulating demand for local Bourbon and Pacamara variety coffee.
In MY 2017/18 consumption is expected to reach 300,000 bags. However, most local consumption continues to be soluble coffee imported from Mexico, Brazil and Nicaragua; as well as locally produced brands. In MY2017/18, soluble domestic consumption is expected to reach 264,000 bags - Green Bean Equivalent (GBE), a three percent increase compared to the previous year. Roasted and ground domestic consumption has also increased reaching 36,000 bags GBE in the same period. However, local consumers continue to favor soluble coffee due to ease of preparation and a lower price tag.
Coffee exports for MY2017/18 are estimated at 553,000 bags, up five percent from the previous estimate as a result of increase in production. In MY2018/19 coffee exports are expected to reach approximately 605,000 bags.
In MY2017/18 the United States is expected to be the main export destination for Salvadoran coffee reaching approximately 232,800 bags, about 42 percent of total exports. Germany continues to be the number two export destination accounting for approximately 22 percent of total exports. Other important destinations are Italy, Belgium, Japan and the UK. South Korea has become a new export destination accounting for 2.3 percent of total exports. This number is expected to grow in MY2018/19 due to a recent free trade agreement with South Korea that has provided duty free access for Salvadoran coffee.
New data compiled by FAS/San Salvador shows stock numbers reaching 56,000 bags in MY2017/18. Stocks for MY2018/19 are expected to drop to 45,000 bags.